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Second Appeals Nos. 20 and 44 of 1981, decided on 22nd January 1984.

---S.13--Sind Rented Premises Ordinance (XVII of 1979), S.21--Transfer of Property Act (IV of 1882), S.108(1)--Sub-tenancy--Creation--Proof- To establish that a person was a sub-tenant, it was necessary to prove that tenant had parted with possession and such person had created interest in estate.

Motal Bai v. Abdul Aziz P L D 1968 Kar. 635 and Abdullah Bhai's case P L D 1966 S C 106 ref.

---S.13--Sind Rented Premises Ordinance (XVII of 1979), Ss.15 & 21- Ejectment-- Subletting, default in payment of rent--Landlord failing to establish subletting--Courts below giving concurrent findings of fact that no default committed by tenant in payment of rent--Interference declined in second appeal.

Saghir Hussain Jafri for Appellant.

A. Aziz Khan for Respondent.

Dates of hearing: 7th and 8th December, 1983.

This judgment will dispose of Second Appeals Nos.20/81 and 44/81. The former one has been filed by the tenant namely Abdul Lakhdir and others hereinafter referred as tenants and the later has been filed by the landlords. These are cross appeals against the judgment passed by the learned Second Additional District Judge, Karachi, disposing of two rent appeals filed by these parties. The predecessor of the present landlords who are respondents in Appeal No.20/81 was an Iranian national and had rented out the disputed premises consisting of the first floor of house No.40, Garden West Karachi, an outhouse and a shop on a monthly rent of Rs.45. Prior to the ejectment case filed by the landlord out which these appeals arise there has been continuous litigation between the parties. In 1961 Muhammad Ali Thawar was appointed as attorney of the landlord and when he tried to realise rent from Badruddin, the brother-in-law of the tenant in respect of the outhouse in which he was living, the tenants filed Suit No.1105/60 against the landlord for declaration and injunction. The landlord also filed a counter-suit bearing No.2418/60 against the tenants. The tenants succeeded in their suit and the landlord was restrained from realising rent from Badruddin. Suit No.1105/60 was decreed while suit No.2418/60 was also decreed in favour of the landlord in the sum of Rs.1,507 Lakhdir and others were declared to be the tenant in respect of the disputed premises. The landlord then filed ejectment case through his attorney on the ground that the premises has been sublet to Badruddin and default has been committed. This Rent Case No.1395 was dismissed on technical ground that Taleby the landlord had died before the institution of the case and, therefore, as the power-of-attorney could not remain valid after his death, the attorney could not filed the case on that basis. It seems that after obtaining a proper power-of-attorney by the legal' heirs of the present landlords who are party in the appeals, ejectment Case No.1481/61 was filed. Both these appeals arise from this ejectment case. It was filed on the ground that the tenants have sublet the outhouse and shop and have defaulted in payment of rent. The tenants contested this case, denied subletting and default. Several preliminary objections were raised during the trial but the learned Controller dismissed the ejectment application on merits. The Controller while disposing of the ejectment application gave his finding on three preliminary issues in favour of the landlord and held that (1) application was not barred under section 13(A) of West Pakistan Urban Rent Restriction Ordinance, (2) that Thawar was legally constituted attorney and application filed by him was maintainable and (3) the attorney had the necessary permission from the State Bank of Pakistan to recover rent on behalf of the landlords, The tenant filed an appeal against this judgment being Rent Appeal No.552/75 in which they challenged the finding on the preliminary issues Nos.(a), (b) and (c) as well as issues Nos.2, 3, 9, 5, and 6. The landlord filed another Appeal No.515/75 and challenged the dismissal of the ejectment application. Both these appeals were decided by the learned Appellate Court by the impugned judgment, whereby the tenants appeal was dismissed and the landlord's appeal was allowed on the ground of subletting. The tenant has been ordered to be ejected. Both the parties have, therefore, filed second appeal in this Court.

Mr.Saghir Hussain Jafri, the learned counsel for the appellant has contended that from the evidence subletting has not been established. He first contended that in the ejectment application the landlords have only alleged that the outhouse has been sublet, but no allegation in respect of the shop has been made. Mr.Aziz Khan the learned counsel for the landlords contended that the ejectment was in respect of the entire premises and as the allegation is of subletting it covers even the shop. Both the learned counsel seem to be arguing under mis apprehension and without ascertaining the correct facts. This argument was based on a reading of the ejectment application as typed in the paper book of the First Appellate Court. I have examined the record of the Rent Controller and find that in the ejectment application the landlords have clearly stated as follows:-

"That the opponents have sublet the first floor of the annexe (outhouse) and the shop on the ground floor and are realising rent from the sub-tenant."

This contention of the appellants tenants has no force.

The learned counsel for the tenant contended that the tenant's father was the original tenant and after his demise the appellant, his brother, and another brother Muhammad Mian were residing and had become the statutory tenants. The outhouse was in possession of his brother Muhammad Mian who is a Doctor and had allowed Sher Ali to stay in the outhouse without charging any rent and whenever he comes back he stays in this house. On these facts the learned counsel contended that subletting of the outhouse has not been established from the evidence. It is established that Sher Ali was residing in the outhouse. The landlords have examined Sher Ali who has stated that Dr. Muhammad Mian is his friend and he has no concern with Abdul Ali Lakhdir and Sultan Lakhdir the elder brothers of Dr. Muhammad Mian. He further stated in his examination-in-chief that he is not paying rent of this premises tit, Abdul Ali Lakhdir. In cross-examination he had stated that the goods, furniture etc. belonging to Dr. Muhammad Mian are lying in the outhouse and whenever he comes to Karachi he stays in the outhouse. He further stated that Dr. Muhammad Mian has gone to Africa and allowed him to stay there till he returns from there. This is the evidence of the landlord's witness, and it is to be seen whether subletting has been established.

In this connection it would be proper to state the evidence in respect of the shop. The allegation of the landlord is that now the shop has been sublet to Jan Muhammad. In this regard besides the statement of the landlord's attorney, Jan Muhammad has been examined on behalf of the landlords as P.W.1.He has stated that he is occupying the shop which belongs to Abdul Ali Lakhdir but he is not paying any rent to him Abdul Ali Lakhdir appeared on behalf of the tenants and has stated that the shop is in his possession and Syed Ali Moosa who was in the shop has already left. He further stated that it is not in occupation of Jan Muhammad. He first denied that he remembers any person by the name of Jan Muhammad having examined in this case, but voluntarily stated that one Jan Muhammad is his partner doing business in his shop, but he was unable to produce any document to substantiate it. He stated that he does not remember the amount of capital as it is a small shop and the partnership has neither been registered with the Registrar, nor with the income-tax. Or, the basis of the aforestated evidence one has to consider whether the outhouse and shop have been sublet

The question whether an arrangement is a sublease or a licence has been the subject-matter of frequent discussion, in several authorities and has been approached with great caution. The same question came up for consideration to Motal Bai v. Abdul Aziz P L D 1968 Kar. 65 in a Second Appeal under West Pakistan Rent Restriction Ordinance, where the tenant of a shop had entered into partnership with others and the partnership deed provided that the tenancy in the shop shall continue and vest with the tenant and on the dissolution of partnership, other partners shall vacate the premises. The question arose whether the tenant had sublet the premises. After referring to several authorities, the following observation was made:---

"This brings me to the second aspect of the question under discussion, which involves the determination as to whether the use of the shop for the partnership business, makes the firm transferee of the lease or sublease of the shop within the meaning of section 13(2)(ii)(a) of the West Pakistan Urban Rent Restriction Ordinance, 1959, or in this use only by way of licence. The concepts 'Transfer of the right in the lease", or sublease of the demised premises", are used in this provision in the sense in which these concepts are used in section 108(j) of the Transfer of Property Act, 1882. But let us look at the meaning of 'lease', itself. 'Lease' is sometimes defined as the grant of a right to the exclusive possession of land for a determinate term less than that which the grantor has himself in the land. This expression has been defined in section 105 of the Transfer of Property Act to mean 'transfer of a right to enjory immovable property made for certain time, express or implied, or in perpertuity, in consideration of a price paid or promised or of money, a share of crops, service of any other thing of value to be rendered, periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. "Their Lordships the Supreme Court have stated in Abdullah Bhai and others v. Ahmad Din that lease is a transfer of interest in an immovable property, giving to the transferee the right of enjoyment of the property during the term of the lease. On the other hand a licence, as defined in section 52 of the Easements Act, 1882 is the right to do or continue to do, in or upon the immovable property of the grantor something which would in the absence of such right be unlawful, and such right does not amount to an easement or an interest in the property. In the words of Kaikaus, J. in the Supreme Court decision just referred to, a licence is merely a competence to do something in or upon the property and the distinction between a 'lease' and a 'licence' is whether any right in immovable property itself, a right in rem, has passed to the grantee. Transfer of a lease, as well as sublease would, therefore mean transfer of the right and interest of the lessee in immovable property, the difference between the two being that in the case of transfer of a lease, the whole interest of the tenant in the demised premises passes to the transferee, so as to create a privity of estate between the landlord and the transferee by making the latter liable to the landlord to pay rent, whereas a sublessee is only a transferee of a term less than the term held by the main lessee, and accordingly there is no privity of estate between the landlord and the sub-lessee.

The learned Judge proceeded to consider many English authorities and after referring to the case of Abdullah Bhai P L D 1966 S C 106 following rule was laid down:-

"The review of all these cases brings out one rule to test whether an arrangement is a licence or a lease or its a consignment or a sublease. This rule is whether it is the intention of the parties that estate or a right in immovable Property should pass to the person concerned, and whether such interest or estate has in fact passed to such person. The determination of the question would depend on the facts, circumstances and conduct of the parties in each case."

Mr. Aziz A.Khan the learned counsel for the landlord has very fairly referred to a passage from the book entitled "The Transfer of Property Act" by Sir Hari Sing Vol. IV, VIIth Edition at page 3611 in which distinguishing between sub-tenant and licensee the learned author has commented as follows:-

"There is a world difference between a sub-tenant and a licensee, In a sub-tenancy, the sub-tenant has interest in the property but in the case of a licence the licensee has the permissible use of the property and the legal possession continues with the owner. Even where a party is in exclusive possession of property circumstances may negative that its possessor was a tenant ......The real test to determine subletting is whether the tenant has walked out of the premises and has handed over exclusive possession and control of the same to be sub-tenant."

From the perusal of the rules laid down it seems clear that in order to establish that a person is a sub-tenant it is necessary to prove that the tenant has parted with the possession and has created an interest in the estate. Now putting the present case to the test laid down by the above authorities it seems that so far the outhouse is concerned the sub-tenancy has not been established because Sher Ali who was examined by the landlords themselves has clearly stated that he is not paying the rent and there are furnitures of Dr. Muhammad Mian and he has merely allowed him to stay and whenever he comes he stays over there. The other aspect is that he has left the outhouse in 1974. These facts show that he had no interest in the estate. So far shop is concerned the learned counsel for the landlord has contended that Abdul Ali Lakhdir has given a contradictory statement and no reliance can be placed on it. No doubt the statement of Abdul Ali Lakhdir to some extent seems to be confused, but the landlords had examined Jan Muhammad the alleged sub-tenant who has stated that possession was given to him by Abdul Ali Lakhdir to whom the shop belongs and he is not paying rent. Considering from this point of view particularly as this is a statement made by the witness of the landlords one is constrained to take the view that Abdul All Lakhdir's statement to the effect that he has not sublet the shop and opened a business in partnership with Jan Muhammad seems to be probable. If the landlords would not have examined Jan Muhammad then the situation may have been quite different. They have taken the risk to examine him and his statement is not favourable to them. Furthermore, there is nothing on record to show that Jan Muhammad is telling lie. He has not been declared hostile by the landlords, therefore, taking all these facts into consideration the subletting of the shop has not been established.

Mr.Aziz Khan, the learned counsel for the landlord while pressing landlord has submitted that Abdul Ali Lakhdir has admitted that he was recovering rent from his brother-in-law who was at one time residing in the outhouse. He further contended that the circumstances are such that the landlords cannot bring any direct evidence of subletting or realisation of rent, therefore, one has to apply the rule of probability and rule of reason to determine that Abdul Ali Lakhdir would be charging rent from persons in occupation of shop anal outhouse. This principle may have been applied to the facts of the present case if the landlord would not have examined Sher Ali and Jan Mohammad or that they would have been examined as witnesses for the tenants and disbelieved or may not have been examined at all. The landlord, have examined these two persons as their witnesses whose statement does not support' the landlords and as they have not been declared hositle; the landlords have failed to establish subletting.

Mr.Aziz Khan, the learned counsel for the landlord's appeal against the finding of the Courts below that no default has been committed, contended that the tenants were depositing rent in Rent Case No.1396 of 1958 which was dismissed on 17-5-1969. Thereafter another Rent Case No.1855/59 was filed. The tenants were depositing rent in terms of the rent order passed in 1970. The learned counsel contended that out of the rent deposited earlier Rs.803 had been withdrawn and the representation about the deposit of rent of the entire arrears before the Controller was not correct. The learned counsel further contended that even after the death of the landlord the tenants continued to deposit rent in a disposed of matter and, therefore, it was not a proper tender and default has been committed.

Mr.Jafri the learned counsel has contended that the tenants were depositing rent in Appal No.63/64 and even after the death of the landlord the tenants continued to deposit rent as there was no authorised person to receive the interfere with this finding. In the result Second Appeal No.20/81 is allowed and Second Appeal No.44/81 is dismissed. The parties to bear their own cost.

M. Y. H. Appeal dismissed.

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